Tracking by IP address is not an accurate method oflong-term tracking, however it is an effective way totrack visitors during their FIRST visit to your site.

It is a good idea to use IP tracking to catch anypeople who have cookies disabled.

Every time your affiliates send someone to theiraffiliate URL, your server should send them to either adynamically generated or pre-generated page with theiraffiliate ID embedded in it. The affiliate's ID shouldalso be stored in the URL, so that if the customerbookmarks and returns, the affiliate is still creditedwith the sale.

In your database of customer profiles, you should storethe ID of the affiliate who referred each customer.Whenever a customer "profile" makes a purchase (onlineor off) you should credit the appropriate affiliate(s)for the sale.

Storing the affiliate's ID in the customer's profile isthe best, most reliable way to track in the long term,both offline and on.

Some systems also allow you to track offline bysupplying the user with a fake phone extension. Thisextension is actually the referring affiliate's ID. Youcan also ask people faxing you to quote an order number- which includes the affiliate's ID.

To catch any who "slip though the cracks", your orderprocessing software should scan your order history forany orders going to the same name, e-mail address orphone number of a customer, and pay the referringaffiliate their due commission.

========================================Where to get affiliate tracking software========================================

Ultimate Affiliate is a good PERL software suite forUNIX servers. Ultimate Affiliate tracks by cookie, IPaddress, and can produce dynamic or static web pagesthat have the ID of the referring affiliate embedded inall internal URLs. All your affiliates' details arestored in a MySQL database.

With a knowledge of PERL and HTML you can customizevirtually any page created by the software.

This software can easily handle recurring commissions,and has graphical stats for both you and youraffiliates. It can handle up to twelve tiers ofcommissions.

I recommend you do not pay out on more than two tiers.More than two tiers is multi-level marketing, whichgenerally has a bad image on the Internet because itattracts spammers. MLM products also tend to be over-priced to pay for the many tiers of commissions

Ultimate Affiliate:http://www.groundbreak.com

================================================Give your affiliates the right tools for the job================================================

One thing that really makes some programs stand head-and-shoulders above the rest is real-time tracking thatshows affiliates the conversion rates for their variouslinks.

That means affiliates can see which of their variouslinks are performing and get an idea why, and whatlinks aren't and how they could be improved.

Affiliates should be able to see the number of click-throughs to each of their different links, the numberof sales that each link has made, and the conversionrate for each link should be calculated for them.

This enables them to figure out how to improve theirlinks, and thus make more money for themselves, and foryou.

They should also be able to set the landing page forthese links, so that they can link to specificproducts.

Affiliates who link to and promote specific productsare a lot more successful than those who simply promoteyour site in general.

The shorter and less your links look like referral URLsthe better. Some people recognize affiliate URLs, andare suspicious of them.

Ninety percent of affiliates won't make a lot of moneyfor you. They need encouragement, motivation, and help.

Consider giving performance bonuses to the top earners.Run a monthly newsletter and praise your top affiliatesin it.

Tell your other affiliates how the top earners did it,and about the performance bonus you gave them. Give youraffiliates ideas on how to promote your products best.

Your top earners will appreciate the ego massage, andyour other affiliates will find out what's possible ifthey put their mind to it.

For more details see:

How to make your affiliates enthusiastically loyalhttp://www.associateprograms.com/search/affiliate-loyalty.shtml

Remember, when you help your affiliates get sales, youhelp yourself get sales.

==============The end result==============

Starting a lifetime affiliate program is not easy, butthe rewards are worth it.

To make your affiliate program successful, you need tomake it attractive to affiliates, and the best way todo that is offer good rewards.

If you pay lifetime commissions you offer affiliatesthe opportunity to earn more money than they normallywould. They will work harder for the better commissionsand in the end, it will pay off with a better, moreeffective affiliate program, that is more profitablefor you.